Highlights—September 6, 2008

Yahoo! IBM Pension and Retirement Issues message board: "IBM
stock dropping" by "ffandrick". Excerpt: Wonder why the stock has been dropping? Check out the
Insider Trading over just a few days. Sam and Randy won't have to worry about pension increases. Totals are approximately:
Sam $71M; Randy $34M. And IBM can't afford to give us over $22K per year retirees an $80 a month increase. Disgusting.

Yahoo! IBM Pension and Retiree Issues message board: "Re:
pension increase" by "ranheimchas". Full excerpt: I had breakfast with a group of about 15
retirees today. The "Pension Increase" topic came up. Only one retiree was given the financial windfall
of $28 per month (gross). Certainly, our medical cost increase will far exceed that amount. I'm sure any pension
increases that were given out will will only come right back to IBM by raising our medical contributions. IBM
is not in business to lose any money for any reason.

Hartford Business Journal editorial: Pension Games.
Excerpts: If you are a middle-class worker counting on the pension promises of a corporation, you might want
to start developing a backup plan for retirement. Your pension assets are more vulnerable now than ever before
because no one in government seems inclined to defend your interests against the sort of financial predators
who brought us the subprime mess. For years now, a number of prominent companies have allowed their pension
plans to fall deeply into the red. Ford Motor, for example, is roughly $9 billion behind. That long-standing
trend is troubling enough. But new developments threaten to raise expenses and solvency risks for rank-and-file
pensioners.

First, U.S. Treasury officials say they are open to allowing companies to sell off their pension plans to
Wall Street firms, which would collect fees for managing the assets. Those lining up to buy pension obligations
range from highly regulated financial firms with deep pockets to small private equity shops that are neither
highly regulated nor strongly capitalized. Congress would have to act to allow the transfers and set minimum
requirements for pension fund acquirers.

There is no groundswell of support for any of this from the 44 million current and future retirees — mostly
rank-and-file workers. What do they get for the new fees that erode their returns or for the potential new
risk to pension plan solvency? Nothing.

The impetus is all coming from the potential acquirers, from the corporations that want an easy way to offload
their pension obligations and from the Pension Benefit Guaranty Corp., which guarantees certain pension benefits
when plans go bust. Those vested interests are sure to lobby fiercely for rules that serve their wallets,
but who will lobby for the pensioners?

Meanwhile, on another front, compensation consultants have come up with a new trick to convert company pension
plans into vehicles for financing executive retirements and golden parachutes. In a nutshell, tax breaks
intended to enhance the pensions of rank-and-file workers are being extended to apply to the executive suite,
despite a law that rightly distinguishes between the two classes.

Under the law, employers get a tax deduction for money they put in pension plans, and those plan balances
can grow tax-free. Any employee can participate, but no employee can take benefits that are disproportionately
large. The law says that when companies give much larger pensions to a few executives, they must do so in
supplemental executive pay plans that don’t carry tax advantages. But hard-charging benefits consultants
have developed edge-of-the-law techniques for sneaking the executive pensions into the tax-advantaged plan.
This trick means taxpayers wind up subsidizing bodacious executive payouts.

Business Week: Book Excerpt:
The
Numerati by Stephen Baker. By building mathematical models of its own employees,
IBM aims to improve productivity and automate management. Excerpts: One of the most promising laboratories
for the Numerati is the workplace, where every keystroke, click, and e-mail can be studied. In a chapter
called "The
Worker," Baker travels to IBM (IBM), where mathematicians are building predictive models of their own
colleagues. An excerpt:

On a late spring morning I drive up into the forests of Westchester County, N.Y., to the headquarters
of IBM's Thomas J. Watson Research Center. It sits like a fortress atop a hill, a long, curved wall of
glass reflecting the cotton-ball clouds floating above. I have a date there with Samer Takriti, a Syrian-born
mathematician. He heads up a team that's piecing together mathematical models of 50,000 of IBM's tech consultants.
The idea is to pile up inventories of all of their skills and then to calculate, mathematically, how best
to deploy them. I'm here to find out how Takriti and his colleagues go about turning IBM's workers into
numbers. If this works, his team plans to apply these models to other companies and to automate much of
what we now call management. ...

Commoditizing Workers: Still, Takriti confesses that he's nervous. His assignment is to translate the
complexity of highly intelligent knowledge workers into the same types of equations and algorithms that
are used to fine-tune shipping or predict the life span and production of a mainframe computer. With time,
he and his team hope to build detailed models for each worker, each one complete with a person's quirks,
daily commute, and allies, perhaps even enemies. These models might one day include whether the workers
eat beef or pork, how seriously they take the Sabbath, whether a bee sting or a peanut sauce could lay
them low. No doubt, some of them thrive even in the filthy air in Beijing or Mexico City, while others
wheeze. If so, the models would eventually include this detail, among countless others. The idea is to
build richly textured models that behave in their symbolic realm just like their flesh-and-blood counterparts.
Then planners can manipulate them, looking for the most efficient combinations. ...

To put together these profiles, Takriti requires mountains of facts about each employee. He has unleashed
some 40 PhDs, from data miners and statisticians to anthropologists, to comb through workers' data. Personnel
files, which include annual evaluations, are off-limits at IBM. But practically every other bit of data
is fair game. Sifting through résumés and project records, the team can assemble a profile of each worker's
skills and experience. Online calendars show how employees use their time and who they meet with. By tracking
the use of cell phones and handheld computers, Takriti's researchers may be able to map the workers' movements.
Call records and e-mails define the social networks of each consultant. Whom do they copy on their e-mails?
Do they send blind copies to certain people? ...

Takriti's scheme is even more ambitious. He is not given to bold forecasts. But if his system is successful,
here's how it will work: Picture an IBM manager who gets an assignment to send a team of five to set up
a call center in Manila. She sits down at the computer and fills out a form. It's almost like booking a
vacation online. She puts in the dates and clicks on menus to describe the job and the skills needed. Perhaps
she stipulates the ideal budget range. The results come back, recommending a particular team. All the skills
are represented. Maybe three of the five people have a history of working together smoothly. They all have
passports and live near airports with direct flights to Manila. One of them even speaks Tagalog.

Everything looks fine, except for one line that's highlighted in red. The budget. It's $40,000 over! The
manager sees that the computer architect on the team is a veritable luminary, a guy who gets written up
in the trade press. Sure, he's a 98.7% fit for the job, but he costs $1,000 an hour. It's as if she shopped
for a weekend getaway in Paris and wound up with a penthouse suite at the Ritz.

Hmmm. The manager asks the system for a cheaper architect. New options come back. One is a new 29-year-old
consultant based in India who costs only $85 per hour. That would certainly patch the hole in the budget.
Unfortunately, he's only a 69% fit for the job. Still, he can handle it, according to the computer, if
he gets two weeks of training. Can the job be delayed?

Australian Services Union: Total
chaos for Westpac & Qantas customers as IBM blocks pay talks. Excerpt: Major airlines, banks, customs
and other key services face meltdown this week as a result of IBM refusing to negotiate a collective agreement
with employees. Online banking, flight bookings and the weekly pay packet may all be affected from Wednesday
when IBM technical support staff are expected to commence four hour rolling stoppages at the crisis centre in
Baulkham Hills, also known as the ‘Flightdeck’. Members of the Australian Services Union (ASU) voted unanimously
in favour of industrial action following IBM’s refusal to negotiate a collective agreement.

Australian Services Union: Threat
of Industrial Action Withdrawn. Talks with IBM and Union Positive. Excerpt: Workers have withdrawn the threat
of industrial action after progress was made in early morning negotiations between IBM and the Australian Services
Unions today. Employees at the IBM Flightdeck in Baulkham Hills had voted to take industrial action in the form
of four hour rolling stoppages following IBM’s refusal to negotiate an agreement with employees. Branch Secretary
of the ASU, Sally McManus, said the negotiations were a positive indication that IBM was prepared to come to
the table and talk with its employees. “The meeting with IBM management today was positive and negotiations will
continue next week.

Los Angeles Times: Renewing
America's 'contract with the middle class'. In the last 25 years, what is good for America and what is good
for much of corporate America have gotten way out of sync. By Leo Hindery Jr. Excerpts: Not all that long
ago, America's prominent business and government leaders widely believed that our nation's prosperity depended
on a strong middle class growing from the bottom up. Workers were rewarded for their hard work with fair wages,
benefits and advancement opportunities -- and our economy and our national security were much stronger for it.
Henry Ford certainly knew this, and often said that his company would prosper only if his workers earned enough
to buy the Fords they produced. And in 1953, when General Motors' president told the Senate that "what was
good for the country was good for General Motors and vice versa," he was simply stating the then-commonly
held belief that success for American corporations generally meant success for America and American workers.

However, over the last 25 years -- especially over the last decade -- what is good for America and what
is good for much of corporate America have gotten way out of sync. Our current business culture too often
emphasizes only short-term corporate profits and shareholder returns -- however and wherever they are generated
-- and in the process, what is good for America is being pushed aside.

This disconnect between the national interest and corporate responsibility and interests has helped shatter
the "contract with the middle class." And in the most painful measure of just how broken this contract
is, based on data from 2005-2006, the top 1% of Americans -- 300,000 -- earn as much as the bottom 150 million
combined. Income inequality is the greatest it has been since 1928, and for every three-year period since
1981, the top 1% of taxpayers have gained, on average, $100 billion in total earnings, while the bottom 80%
have lost $100 billion.

Corporate America frequently justifies its actions, however harmful those actions may be to workers and
to the local and national economies, as necessary to remain competitive globally. But globalization doesn't
have to mean more job insecurity, stagnant wages for workers and little or no healthcare coverage for 75
million people. It doesn't have to mean threats to move jobs overseas and slashed benefits just because multinational
corporations have almost complete mobility of capital and technology and American workers have almost none.
It doesn't have to mean excessive executive compensation and preferential corporate and personal taxes. And
it doesn't have to mean unfair trade practices of the sort that are contributing greatly to the extreme income
inequality.

Our overseas trading partners have generally gone in a completely different direction. These countries have
instead instituted economic policies to hold on to and improve the quality of their existing jobs and to
induce foreign corporations to shift production facilities and technology their way. This is particularly
the case throughout Asia. In China, for example, 60% of its exports come from "foreign-invested companies."

Greenville News: Pension
freezes affect mid-career employees. Retirement-age workers, those in their 20s remain relatively safe.
By Rudolph Bell. Excerpts: For many years, companies have been “freezing” their pension plans to save money
and reduce their liabilities from retired workers. Sometimes, companies decide not to let new employees enroll
in the pension plan but keep the plan alive for workers who were already enrolled. Other times, companies freeze
the pension plan for all workers. When this happens, workers get what they have already accumulated in the
plan when they retire or leave the company. They just don’t accrue any additional benefit going forward.

When that happens, employees of different ages can be affected differently. For workers in their 20s, the
change may not matter much. They still have time to build up a balance in a 401(k) plan, a different way
of saving for retirement that is typically available to workers whose pension plans are frozen. ...

“It’s a downer” for mid-career workers, said Jeremy Strickler, a certified financial planner with the Greenville
branch of Raymond James & Associates. “There’s not much silver lining — except that it may be one of
those life events that triggers people to act, and they didn’t act before.” Workers whose pension plans are
frozen should take the opportunity to reassess their retirement plans, Strickler said. “You might have to
go make more money somewhere else,” he said. At the very least, mid-career workers whose pension plans are
frozen should increase their contributions to a 401(k).

PlanSponsor: Worker Finances Stretched too
Thin to Save. Excerpts: The current economy has workers stretching their paychecks more than ever, according
to a nationwide survey of over 7,192 workers by CareerBuilder.com. Nearly half of workers (47%) say they always
or usually live paycheck-to-paycheck just to make ends meet, up from 43% last year, according to a press release.
One-in-five (21%) workers with salaries of $100,000 or more also report they live paycheck-to-paycheck.

Stretching their income leaves little room to save. A quarter of workers say they do not put any money aside
for savings each month, and of those who do save, 34% set aside less than $100 a month and 18% save $50 or
less. In addition, a third of workers say they do not participate in a 401k, IRA, or other retirement plan.
One in ten workers making more than $100,000 report putting no money into savings each month or participating
in a 401k, IRA, or comparable retirement plan.

New York Times Op-Ed: Running
From Reality. By Bob Herbert. Excerpts: In his acceptance speech on Thursday night, Senator John McCain
did his best Sam Cooke imitation (“A Change is Gonna Come”) and vowed to put the country “back on the road
to prosperity and peace.” Mr. McCain spoke at the end of a day in which stock market indexes plunged. The next
morning the Labor Department gave us the grim news that another 84,000 jobs had been lost in August, and that
the official unemployment rate had climbed to 6.1 percent — the highest in five years.
...

It stretches the mind almost to the breaking point to think of John McCain as an agent of substantive change.
He once believed that Phil Gramm was the most qualified person in the United States to be president. ...

For most voters, the No. 1 issue in this campaign is the financial struggle facing working families that
are trying to cope with job losses, declining wages, the high cost of health care, home foreclosures, bankruptcies
and the like. To a great extent these problems are the result of national policies, forged under Republican
rule, that overwhelmingly favored the interests of the very wealthy over working people.

Senator McCain’s economic guru through all of this was Mr. Gramm, a former Republican senator from Texas
and chairman of the banking committee. He was a demon for deregulation, and he and his wife, Wendy, who once
led the presidential Task Force on Regulatory Relief in the Reagan administration, were among the big recipients
of Enron’s largess. Phil Gramm was one of the lead architects of the breathtakingly irresponsible policies
(No more restraints! No more regulation!) that led to the subprime mortgage meltdown and the current credit
disaster.

A corporate insider in the Bush-Cheney mold, Mr. Gramm was thought to be in line to serve as treasury secretary
in a McCain administration until July when he put his foot very publicly in his mouth. To Senator McCain’s
great embarrassment, Mr. Gramm dismissed the economic downturn as a “mental recession” and complained that
the U.S. had become a “nation of whiners.”

That may have been a political no-no, but it was an accurate expression of the slavish devotion of the G.O.P.
to the rich and powerful among us, and of the party’s contempt for the interests of working families and
the poor. Senator McCain, it should be noted, fully shared Mr. Gramm’s anti-regulatory zeal. This is an odd
crowd, indeed, to be offering itself as a champion for working people.

Newsweek: The Politics of Prevention. Cancer screening and other
measures for heading off disease don't always reduce health-care costs. By Mary Carmichael. Excerpt: Preventive
care sounds like a win-win—conventional wisdom says it makes for both healthier patients and lower health-care
costs. It's a favorite topic of politicians, even more so than usual this year. Sen. Barack Obama's campaign
links "disease-management
programs" to smaller price tags for health care, and Sen. John McCain's says that "by emphasizing prevention
… we can reduce health-care costs." But wait, can we? A recent paper in The New England Journal of Medicine
says the conventional wisdom is wrong: preventive-care programs usually result in higher payouts, not lower
ones. So will the candidates' preventive-care plans add even more dollars to what we already pay? Newsweek's
Mary Carmichael spoke with two of the paper's authors, Peter Neumann and Joshua Cohen, both health-policy researchers
at Tufts Medical Center.

New on the Alliance@IBM Site:

Comment 08/30/08: To Anonymous: In reference to the link you supplied. Yes there is evidence of the "Numerati" scripts
running in the background. I have spoken with a number of other employees who are all complaining about
their laptops being bogged down over the last couple of months. There was a project I had heard of, and
I am sorry I cannot remember the name of it, several months ago, where they are using it on the skills
database to find the "right" skill for special projects. I cannot understand why more people
are not upset about this?! If I find out what the executable is I will remove it from my laptop. IBM is
going to market these tools for other businesses. This will sure cut back on communication between employees...seems
like another moronic management tool to me. I spend most of my day on calls...how are they going to track
that? -just1waiting-

Comment 08/30/08: Interestingly, one example in the Numerati story involved the discovery that an Indian
architect cost less than an American one. Aside from this, I find disconcerting the amount of spying described:
e.g. tracking the distribution lists on your e-mails. And drawing conclusions about you based on whether
you are included on others' lists or not. Big Brother factorial! -Innumerate-

Comment 08/30/08: The Numerati story is VERY disturbing. It is 100% Big Brother! I realize IBM can do
anything they want at this point, but maybe with a union we would be able to put limits on this sort of
thing. Another reason to join the union. -miss understanding-

Comment 09/1/08: Do we want IBM management run by Numerati? IBM is scanning your ThinkPad, your e-mail,
and activities so that management can break down each worker into sets of skills, knowledge, and metrics.
There is no more "respect for the individual". (per
BusinessWeek 09/08/08): "grunt workers
in this hierarchy get far less consideration. They're calculated as commodities. Their skills are fungible.
The company should keep its commodity workers laboring as close as possible to 100% of the time." IBM
is not in the commodity business when it comes to products, but it is when it comes to people. Let's not
become commodity resources. This "big brother" surveillance is not for your good. Stop the spy
ware! -Joe Punchclock-

Comment 09/1/08: From the article, it appears that the creator of Numerati at IBM Research bailed! Also,
I also know that Rakesh Aggarwal ("the father of data mining") bailed IBM Research as well. Takriti,
it turns out months later, masters these market dynamics: He was able to shop his gilded Numerati credentials
to several Web companies and banks, and finally leaves IBM in late 2007 for a post as a top mathematician
at Goldman Sachs. Work on the modeling project continues apace, says IBM.) -concerned_phd-

Comment 09/4/08: The biggest problem with Numerati is they once again inverted the pyramid. They assume
someone with a thousand contacts and a hundred emails a day is a great worker. The opposite is true in
most cases. Someone reading and responding to that many emails etc is doing NO REAL WORK. They are producing
neither revenue or profit and are in fact costing the company money. Unless the persons job is to specifically
handle emails in great quantity then they are doing their job. Otherwise they are just producing an Emountain
of Epaper that ties up half the company's resources reading and responding and not producing a damn thing.
Just like a first line manager. -Exodus2007-

Comment 09/5/08: >> They assume someone with a thousand contacts and a hundred
emails a day is a great worker. << And I guess to expand upon the idea of who is connected, IBM has just released
their own version of MySpace or LinkedIn. It's called IBMR - I Build My Reputation. They think this shows
IBM is part of the Web 2.0 trend. But this so-called social networking site claims fellow workers can leave
feedback about you confidentially and you can recognize peers anonymously. Like anything on an IBM system
is really"confidential" and "anonymous".-Anonymous-

Comment 09/3/08: When I was RA'd I was told by my manager that I was not chosen for any particular reason,
and that it was just a matter of numbers. My former team mates told me later, that in a meeting, she told
them that i was chosen because I challenged her, and I was also called "too disgruntled". I challenged
her because she was always wrong and had no idea how to be a manager. Somebody who was a programmer for
25 years and now suddenly given a managers job is just not qualified. She was constantly asking other managers
how to do everything. In the end, she lied to my face, but it makes no difference now. I have a better
job and would never wish that place on anybody. -IG-

Comment 09/4/08: Can anyone tell me how this works? I was RA'd...effective in October. I am a remote
employee. What do I do with this 4-year old laptop? Will my phone bill start coming to me or will it be
cut off? Boss does not seem to be interested in responding to my questions. Thanks! -Black and Blew-

Comment 09/5/08: To Black-and-Blew: I'm sorry to hear about you being RA'd. That sucks. I left IBM but
on my own, not as a result of an RA. But when it comes to being remote and IBM's assets, the rules are
the same. No matter how you leave, if you're a remote employee, you'll need to return all IBM assets (laptop,
cell phone, pager, Corporate AMEX card (cut up, of course!) to your manager. As a matter of fact, they
will WITHHOLD your last paycheck pending receipt of the laptop. Isn't that cute? Yup, they did it to me.
My Moron-of-a-former-manager didn't give me the proper shipping paperwork, instructions, forms, whatever,
for me to pack up that piece of crap and get it back to him.

If your manager isn't talking, go UPLINE and ask HIS/HER boss for information on where to return that
asset. They should send you some sort of an airbill to use to affix to the box and then all you should
do is call a number of one of the shippers and they will pick it up and give you the receipt (and tracking
number). Save that!! If you put in a phone line in your home for business use only, arrange to have that
line disconnected effective your last day. And submit your expenses for reimbursement so that you're compensated
for when the final phone bill arrives.

If you intend to keep your high-speed online service (i.e. cable modem, DSL, whatever), you'll have
to pay for that yourself. When I left, I made sure that I put in up to and including the current month
for all of my business services (phone & cable modem) so that I wasn't left holding the bill and
no way to get reimbursed. Good luck on your job search! Use this time (and your laptop) to hunt for another
position! Right now, finding another job should be your main job. Screw Big Blew!! -Mistressofthei5-

Comment 09/5/08: To Black and Blew: If you have a company phone line they will most likely turn if off.
They will also probably send you a box to send that laptop back. Send it back completely wiped out and
formatted. My manager said to me, don't format it, because somebody else might need it. Well piss on them.
Wipe it clean. What to do with your ibm equipment is the least of your worries. Go online now while you
can, and print off all the info on your 401k, insurance, pension balance, etc. Make sure you get all your
vacation pay and all your MONEY. When you start a new job some place else, you'll wonder why you stayed
in this dump for so long. Remember, it's better once you're out of there, so much better you won't believe
it. Spend every minute from now on looking for another job and don't do another minute of work for these
dirt bags. Take care of number 1. At least you have a little time. Look for your new job on their time.
-Ra'd last year-

Comment 09/2/08: Salary = $45,000; Band Level = 3; Job Title = SSR; Years Service = 8; Hours/Week = 50+;
Div Name = IGS; Location = Northern, NY; Message = After getting the axe at one of the manufacturing plants
I took this job as an SSR. They made me take a band cut but I didn't loose any pay. I thought life in a
IBM manufacturing plant was hell but life as an SSR is worse. Needless to say I am working on my exit strategy
now. IBM is a terrible place to work. -Anonymous-

Comment 9/01/08: Relative Contribution is just a new spin on an old appraisal skew. But now it has a
dark side. When you get a 3 you get no bonus, no chance for a raise, little chance of getting another job
if you look (any manager does not want to put up a fight with his manager to hire you as a 3 performer),
and you have a good chance of a layoff. An Open Door will increase your chances of a layoff and rarely
changes your PBC rating. Remember, the Open Door process is not supposed to be fair. You never get a chance
to be confronted by management or their witnesses on the issues they raise against you. Since management
goes second you do not have an opportunity for a rebuttal but anything you say management can respond to.
So what do you do? Join the union. I did many years ago and am glad to continue having the opportunity
to support being a small voice in a big pond. -minnow-

Comment 9/03/08: Just wait to see your GDP if you are a PBC 2 this year.. it's gonna suck as bad as your
recent raise. You'll get a little more than a PBC 3. IBM has to do this to remain competitive supposedly.
Don't be surprised that PBC 2's in 2010 get zilch for GDP as part of IBM's high performamce culture action
plan. -anonymous-

Comment 9/03/08: IBM's high performance culture? Now that right there is funny. More and more I see the
majority not giving a crap. The cancer has taken hold and spread. It's too late for an antidote. IBM US
is on a glidepath to destruction. -BluePigaCookin-

Vault Message Board Posts:

If you hire good people and treat them well, they will try to do a good job.
They will stimulate one another by their vigor and example.
They will set a fast pace for themselves.
Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will
share in its sucess, they will contribute in a major way.
The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders.
—Thomas J. Watson, Jr., from A
Business and Its Beliefs: The Ideas That Helped Build IBM.

This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the
establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a
violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations
Act, notice is given that this site and all of its content, messages, communications, or other content is considered
to be a union gathering.